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Environmental groups: Justification for Dominion's Atlantic Coast Pipeline has 'eroded'

Environmental groups: Justification for Dominion's Atlantic Coast Pipeline has 'eroded'

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A coalition of environmental groups wants a hearing on the need for Dominion Energy’s Atlantic Coast Pipeline, claiming in a federal filing today that the justifications for the 600-mile, $5.5 billion natural gas pipeline project have “eroded, if they ever existed.”

“The pipeline, which is slated to fuel gas-fired power plants in Virginia and North Carolina, is not needed to keep the lights on,” says the filing by the groups, which includes the Natural Resources Defense Council, a large national environmental group, and local organizations, including the Shenandoah Valley Network, Friends of Buckingham, Cowpasture River Preservation Association and the Winyah Rivers Foundation, among others.

The groups are seeking an evidentiary hearing before the Federal Energy Regulatory Commission, which is weighing the proposed pipeline’s environmental effects, rates and necessity. The filing cites energy demand forecasts they say will be level or declining through 2030, which could undercut the need for the project. They also argue that existing natural gas infrastructure is sufficient to meet demand and that “rapidly declining costs of renewable energy will render gas-fired power generation uneconomic in coming years.”

“Demand for gas-fired generation is not growing in the region or across the country thanks to increased energy efficiency and the availability of solar and wind alternatives,” the document says. “The commission must resolve these factual issues before making a decision on Atlantic’s application or risk a decision clouded by uncertainty or, worse, construction of an unnecessary pipeline with significant adverse impacts for ratepayers and landowners.”

Aaron Ruby, a spokesman for Dominion, derided the filing as an “armchair analysis” that “pales in comparison to the years of study and planning that went into developing the Atlantic Coast Pipeline.”

“None of the groups involved in this motion have ever heated a home, powered a business or generated a single megawatt of electricity,” Ruby said. “We understand the needs of our customers and what it takes to keep their lights on, heat their homes and power their businesses. There is no question about the urgent public need for this infrastructure.”

The conservation groups also argue that FERC risks approving an expensive project that relies on “captive ratepayers” to justify its existence.

“These companies are gambling with ratepayer money in order to build their $5-6 billion project,” the filing says. “Not only do they own the pipeline developer, they also own the shippers that are or serve regulated utilities and have signed precedent agreements for the pipeline’s capacity.”

The groups are represented by the Southern Environmental Law Center in Charlottesville, which said in a news release Wednesday that Dominion and Duke Energy, a partner in the project, stand to earn a guaranteed 14 percent to 15 percent return for their shareholders.

“If you look behind the claims that this pipeline is needed, what you’ll find is that Dominion and Duke subsidiaries are contracting with each other to manufacture a need for natural gas in Virginia and North Carolina,” said Greg Buppert, an attorney with the center. “This pipeline will provide Duke and Dominion with an exceptionally high rate of return at little to no risk.”

According to PJM Interconnection, which coordinates and directs the electrical grid for a region that includes Virginia, summer peak load in Dominion’s service area will go from 19,729 megawatts in 2017 to about 20,501 megawatts by 2027, an annual growth rate of less than a half of a percent. Dominion’s projections for that same time frame predict growth from 20,014 megawatts in 2017 to 23,235 megawatts in 2027.

The Integrated Resource Plan that Duke Energy Carolinas, which provides electricity to 2.4 million customers in North Carolina and South Carolina, filed in September predicted about a 1.1 percent annual energy consumption growth rate for all customers over the next 15 years.

But those figures don’t tell the whole story, the utilities argue.

Tammie McGee, a Duke spokeswoman, said the utility has retired about half of its coal-fired generation fleet in North Carolina and is building natural gas plants to replace them. The pipeline project has its origins in a 2014 joint request for proposals by Duke Energy and Piedmont Natural Gas to build a second wholesale natural gas pipeline in the state.

“At its core, this is a market in search of a pipeline, not a pipeline in search of market,” said Ruby, the Dominion spokesman. He said existing pipelines in the region are “fully tapped.”

Whether FERC might grant the request for the hearing wasn’t clear Wednesday. Tamara Young-Allen, a spokeswoman for FERC, said the commission does not comment on pending decisions.

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